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Sector Analysis: Bullish Sentiment Is Still Alive And Well – Week Ending Jan 13, 2017.

|Includes: XLB, XLE, Financial Select Sector SPDR ETF (XLF), XLI, XLK, XLP, XLU, XLV, XLY

Weekly Sector Recap

Despite the weak finish for the S&P 500, Cyclicals and Technology had decent weekly gains. As noted in the following chart, three of the four economically-sensitive (aggressive) sectors finished positive. Financials took a bit of a breather last week (-0.13%). Its fortunes are tied to the 10-year Treasury yield, which was off 1.57% for the week…

Month-to-Date Sector Recap

As mentioned in last week's Instablog, the Cyclicals, Healthcare, and Technology sectors all have historical seasonal strength in January. The following month-to-date chart reinforces that trend…

The Healthcare sector took a bit of hit last week (specifically Biotech & Pharma). President-elect Trump criticized bio-pharma firms during his Wednesday press conference. Even with that Healthcare is still up a respectable 2.87% for the month.

The following chart is a month-to-date performance summary for the Healthcare sector's five industry groups. Only Pharmaceuticals is lagging the S&P 500, but all five groups still have respectable gains for the month, so far…

Month-to-Date Market Overview

So far January shows a bullish bent to the overall market. Base metals are demonstrating strength; some of this is related to the recent pullback in the U.S. Dollar. However, the commodity complex may finally be bottoming. This would be a very bullish development.

Transports are outperforming Utilities in January. This is a bullish sign. Transports are the growth engine of the economy - Railroads, Truckers, Delivery Services, and Airlines. The Nasdaq is outpacing the S&P 500 and the Dow Jones Industrial Average. This is another bullish sign - strength in Nasdaq stocks represents a risk-on market sentiment.

The only caution flag is the relative weakness in small-cap stocks. Typically you want to see the small caps leading in a bullish market environment. This weakness may only be temporary due to the downdraft in Biotech last week. Many of those Biotech's are small-cap names.

Thanks for the read…

Previous Instablog's for Reference:

Sector Analysis: Healthcare Driven By Seasonality, Transports Nearing Support - Week Ending Jan 6, 2017.

Sector Analysis: Defensive Sectors Are Relative Leaders Entering 2017 - Week Ending Dec 30, 2016.

Sector Analysis: Is Defensive Posturing Starting To Develop? - Week Ending Dec. 23, 2016.

Sector Analysis: Trump Rally Extended & Cyclicals Sector Raising Caution Flag- Week Ending Dec. 16, 2016.

Sector Analysis: Trump Rally Resumes With Seasonality Tailwinds- Week Ending Dec 9, 2016.

Sector Analysis: Trump Rally Takes A Breather - Week Ending Dec 2, 2016.

Sector Analysis: The Trump Rally Was Telegraphed By The Transports - Week Ending Nov. 25, 2016.

Sector Analysis: Dow Transports Telegraphing Strength - Week Ending Nov. 4, 2016.